Lao recently published a study entitled ‘Current Situation, Issues and Suggestions Concerning the Development of the Deep Cooperation Zone between Guangdong and Macao in Hengqin’, which presents a retrospective of the development situation of the Deep Cooperation Zone since its founding in 2021.
The economist warns of the need to clarify the legal framework of the special zone on Ilha da Montanha, and that, except for the financial industry, most of the target industries earmarked for development in the area will still be developed.
“The contribution of the financial sector to the GDP and tax revenues of the Deep Cooperation Zone occupied about 40 percent; In these terms, it can be seen that, on the one hand, the modern financial sector, one of the four priority industrial sectors, is developing at an accelerated pace”, highlighted the former coordinator of the Office for the Study of Policies of the Government of the Special Administrative Region from Macao.
The economist stresses that the “Cross-Border Financial Management Project” worked well, with transactions relating to Macau’s income and expenses reaching more than 90 percent.
By the first half of 2023, the value of settlements in yuan made at banks in the Deep Cooperation Zone reached 210 billion yuan, representing an increase of more than 40 percent over the same period of the previous year.
Lao Pun Lap
“With the launch of a series of measures to support the development of the financial sector and the listing of companies on the stock exchange, the financial sector will enter a new era of continuous and accelerated development”, he notes.
“On the other hand, the scientific and technological research and development industry, the high-end manufacturing industry, and other industries are still to be developed”
The economist points out that despite the integrated circuits and biomedicine industries having achieved some results in 2022, the scope of the sectoral set is still “relatively small and the effects and dynamism are still unsatisfactory”.
“Furthermore, the qualified staff, the market and the techniques, which support investment and the development of industries in the Deep Cooperation Zone, are not yet encouraging, so resorting only to tax benefits to attract investment is not possible. achieve a stable and sustainable development”, he highlighted.
Clarifications are needed
Lao indicates that although the Norms for promoting the development of the Cooperation Zone have been in force since March 1, 2023, the law of the cooperation zone ‘whose hierarchy is superior, is not yet elaborated’.
The former deputy and former coordinator of the Office for the Study of Government Policies also warns that the basis for the constitution and functioning of the Executive Committee of the Deep Cooperation Zone, as a legal entity, comes only from the “Decision of the management system of the Zone of Deep Cooperation”. In-depth Cooperation between Guangdong and Macao in Hengqin”, taken on September 16, 2021 by the Standing Committee of the Guangdong Provincial People’s Congress.
“Which means that the administrative categories of the different levels of the management structure of the Deep Cooperation Zone are still not clear”, he warns.
Meanwhile, although the management system of the Deep Cooperation Zone provides that the governments of Guangdong and Zhuhai provinces delegate management powers at provincial and municipal level to the Executive Committee of the Deep Cooperation Zone and the respective bodies carrying out the works , ‘until now, the delegation of competences and the tasks in charge are still not very clear’, says Lao.
As an example, Lao highlights how, at the moment, the staff of the various services within the Zone is composed mainly of officials from Mainland China, recruited locally by the Executive Committee, and by Macao officials seconded by the Macao SAR Government.
The administrative categories of the different levels of the management structure of the Deep Cooperation Zone are not yet clear”
This composition makes it necessary to articulate the workers on both sides, in terms of mentality and ways of working.
For the economist, there is still a “great discrepancy between Hengqin and Macau in terms of the legal system and the level of openness,” with no examples of success to serve as a reference.
“It is necessary to constantly explore and advance and, in fact, it is difficult to articulate them, in substantial terms, in a short period”, points out the economist.
Low attractiveness
Lao also highlighted how the number of residents who choose to travel to the Deep Cooperation Zone is still relatively small.
A recent study by the General Association of Chong Wa Students concludes that only ten percent of local youth who attend higher education are willing to move to the Deep Cooperation Zone in Hengqin to live and work.
For the economist, the low attractiveness is due to the different entry policies, customs control, health inspections, epidemic prevention and control measures in force since the creation of the Zone.
“In this way, it is still difficult to have a concrete integration of life between the two sides”, he warns.
By April 2023, there were 7,418 Macao residents working and living in the Deep Cooperation Zone and 1,130 qualified staff with qualifications to carry out activities in the zone.
